As market researchers and analyst anticipate luxury & designer watch market to grow, various companies are encasing on this growth market. Movado Group (MOV, Financial) is banking on this growth market of luxury goods, and is also a leading distributer for various leading brands in the world. The luxury goods markets comprises of jewelries, watches, leather accessories, perfumes, garments, designers footwear. Some of the leading luxury brands that are associated with Movado is EBEL®, CONCORD®, ESQ® Movado, COACH®, TOMMY HILFIGER®, HUGO BOSS®, JUICY COUTURE®, LACOSTE® and SCUDERIA FERRARI® watches worldwide. The company also operates Movado stores in various location spread across the United States. The company is primarily focused on the luxury watches markets as it associated with the leading brands in the world.
The share prices of the company had crashed but this can be perfect time for an investor to consider Movado in their portfolio. The company has been beating the consensus estimates which exemplifies that it has been performing better than anticipated by the consensus of analyst. The stocks are currently being traded at around $27.5 (as I write this article), and the 52 low-high price range of $25.10 - $48.27. So it can be the right time to consider buying this stock.
Quarter overview
The company recently declared its quarterly results which was not so revealing in terms of year over year growth. The revenue for the third quarter marginally declined by 0.6% year over year, to record $%188.6 million as compared to $189.7 million is same quarter last year. But if we observe the consolidated revenue of the first nine month of the current fiscal, it did record growth. The consolidated revenue for the first nine months of fiscal 2015 increased 3.4% to record $453 million as compared to $438 million recorded in the first nine month of the last fiscal year of 2014. The decline in revenue for the quarter mainly attributed to low sales in the luxury brand category, while it witnessed growth in the licensed brand and retail categories.
Outlook
For the fiscal 2015, the company anticipates consolidated revenue to range in between $585 million to $590 million, growth of 1% to 2%. The operating profit is anticipated to be in the range of $68 million to $70 million and earnings per diluted share will be in the range of $1.80 to $1.85.
The company has been making strategic investment in various brand promotions and sales activities to boost its sales revenues in future. This can hit the operating profit of the company in the next quarter, but will yield better returns in future as branding will certainly leverage sales growth in future.
Share Repurchase can provide impetus to EPS
The repurchase programs of the company does exemplify that it safeguards the interest of their investors. The company has revised the share repurchase programs; this certainly will leverage the confidence of an investor in the company. Furthermore, it will have a positive impact on the EPS of the share as with every share repurchase programs the share outstanding is reduced and EPS increased. Under the revised share repurchase programs the company increased authorized amount from $50 million to $100 million. Under this the company plans to purchase its common outstanding share at regular time interval prevailing to the market conditions.
Conclusion
The share prices of the company has witness a steep decline (lowest since August 2012), but this can be the perfect time to include this stocks in your portfolio. The company maintains an impressive forwards P/E ratio of 13.48, and with this P/E the company can provide good return in future, to its investors. With the execution for its recent revised share repurchase programs will have positive impact on the EPS value of the share. Market analyst also estimates that the company can achieve a growth of 15% every year for next five years.
